‘Settling that debt is more important than postponing projects worth millions.’
China Evergrande Group confirmed the sale of the Crystal City project located east of Hangzhou worth US $ 575 million to 2 state -owned firms because liquidity issues have affected the progress of the project.
According to the Evergrande filing, the Crystal City project including land ownership as well as the building was sold to Zhejiang Zhejian Real Estate Group and Zhejiang Construction Engineering Group on Wednesday.
The file also stated that the proceeds from the sale will pay off the construction debt of 920.7 million Yuan to Zhejiang Construction Engineering and the surplus will be used as general working capital.
The deal is expected to record a profit of about 216 million Yuan.
Generally, Evergrande is still struggling with a $ 300 billion liability burden to be paid to creditors and suppliers.
As a result, China has decided to intervene by allowing state -owned firms to purchase a number of Evergrande assets and projects in a restructuring effort to alleviate market concerns as well as prevent economic collapse.
Meanwhile, Evergrande set up an independent committee on Tuesday to investigate how the bank could seize 13.4 billion Yuan in deposits of its subsidiary, Evergrande Property Services Group, which were pledged as third-party guarantees.
A company statement said preliminary investigations found deposit -related backing and enforcement by banks to take place in 2021.
Meanwhile, shares of China’s Evergrande New Energy Vehicle Group unit fell 14.5% while shares of Evergrande and Evergrande Property Services were suspended since Monday.
